The Tragedy of Donald Trump. Or, Dordt College Helps Make News

Over the years, several of my posts have mentioned my undergraduate alma mater, Dordt College. (Check here and here for some examples.) Given its location in Iowa, Dordt has offered the B.J. Haan auditorium to all candidates running for their party's nomination in the Iowa caucuses. Of this year's Democrats, only Larry Lessig took advantage of the opportunity (bonus points for anyone who can honestly say he or she even knew Lessig was running) and that the day before he dropped out. (Lessig was the only person who could make Martin O'Malley look like a serious candidate.)

More Republicans have taken advantage of the opportunity afforded by Dordt, perhaps because it's located in Sioux County, 80% of whose residents reliably vote Republican in presidential elections. A few days ago those interested in one of the leading Republican contenders, Donald Trump, managed to fill every seat in the auditorium as well as several remote viewing locations. Known more for his rhetoric than his insights, Trump managed to leave even a supportive audience scratching their heads with this well-reported remark:

I could stand in the middle of Fifth Avenue and shoot somebody, and I wouldn't lose any voters, OK? It's like incredible.

For news reports about his remarks check the Sioux City Journal (here) and the Minneapolis Star-Tribune (here). A recording is available on YouTube here.

Two matters about Trump's remarks cause some regret. First is the risk that some folks who don't know about Dordt's open-door policy for presidential candidates will mistakenly conclude that the college in some way support Trump or his views. Such were the concerns express in Jason Lief's blog here. I frankly don't think that's likely to be the case, especially in light of the remarks of Eric Hoekstra, Dordt's president:

Each time a candidate comes to campus, I have a certain sense of “cringe” for what it says to our students—political speeches are always full of broad-brush promises about what the candidate will do. There isn’t a candidate or party that can be 100% biblical or reformational—at least it seems that way to me. Opening our facilities to political candidates in no way implies an endorsement of their views.
Our choices are:

1.    To invite no candidates and have none of them on our campus
2.    To allow every candidate in good standing with their party equal access to our campus
3.    To pick and choose those who are worthy of having access to our campus and those who are not

We’ve chosen path no. 2. To fulfill our mission (equipping students, alumni, and the broader community to work effectively for Christ-centered renewal), this seems the best path with regard to political candidates. Certainly, option no. 1 would be to abdicate our mission. I don’t believe option no. 3 would be obediently responding to our calling as an educational institution. It would also violate our status as a nonprofit institution because it would be considered political speech.

The vitriolic nature of Trump's remarks and the vacuous nature of his "solutions" causes me greater regret. On a variety of issues Trump speaks to matters that are very real to a large number of Americans. The decline in numbers of jobs for working class Americans is real. The shrinking middle class is real. The ever-deepening penetration of the national-security state is real. Yet, Trump's bombast and undisguised opportunism means that discussions of new solutions to these concerns are (and certainly will be) shunted aside when the Trump balloon bursts.

Populism has a long and storied history in American politics (e.g., William Jennings Bryan, Wisconsin's "Fighting" Bob La Follette, and, more recently, Ross Perot). While its leaders were serious, populism as a movement failed to provide practical solutions to the problems its leaders identified.

More invidious than previous populists, however, is Donald Trump who is not serious. He is a corporatist who has used the power of the government to line his own pockets and is now masquerading as a friend of the people. Frauds regularly populate American culture (and sometimes American politics) but the real damage Trump will leave in his wake is a discrediting of non-liberal solutions to the problems animating his followers.

American political life is currently dominated, on the Left, by Progressive (state-centered) and, on the Right, by neo-liberal (corporate-centered) approaches. Neither a top-down nor a side-over approach to human society fundamentally addresses the real concerns of many real people. Neither is likely to cultivate communities in which human flourishing can grow and thrive.

Thus, Trump's flamboyant personal aggrandizement will in the end serve only to promote more of the same. A same that in which we see a withering of virtue and community and a never-ending growth of social atomism and end-less consumption.

Fred Siegel puts it well in the New City Journal here:

Trump’s a big-city guy with a big mouth who made his money from casinos and TV shows and went bankrupt twice. His appeal lies in his brashness—his willingness to violate politically correct conventions that are widely despised. It was said in mistaken defense of Joe McCarthy that, unlike the liberals, he at least understood that the Communists were our enemies. True enough, but as Obama understands, liberals dined out for decades on the inanities of McCarthyism. Obama hopes that Trump will serve the same purpose. (Emphasis added.)

About two months ago I posted here about suspicions that LIBOR (the London Interbank Offered Rate) had been manipulated by the participating banks. I concluded with the observation that borrowers whose commercial loan interest rates were liked to LIBOR shouldn't care; after all, the manipulation was downward, not up.

The editors of The Economist differ. Read here to see their argument that even borrowers should care: "Borrowing made cheap by financial distortions is not a good thing ..." because under-priced risk destabilizes the financial (and thus all other) markets.

Right from a systems point of view, no doubt. And why results of the current investigations into LIBOR manipulation should be make public sooner than later.

Markets and Capitalisms

Communitarian types like Stanley Hauerwas and lots of others often decry capitalistic economies because they tend to dissolve natural and social bonds and relationships. The capitalist mantra of creative destruction is not, one must admit, heartwarming. Free marketeers such as folks associated with the American Tea Party movement are pro-market but express some queasiness about the way capitalism has been practiced in America. Everyone can observe that the recent privatization of profits together with the socialization of losses in the financial industry (and others) gives the lie to a "free" market.

If you click here you'll be taken to a post by Peter Leithart where he briefly comments on a book that observes that there is nothing as capitalism as such. In other words, there are as many capitalisms as the are political economies in which there is a market for goods and services. The cited author takes the position that the presence of a market does not determine whether its exchanges corrode or maintain the natural and social bonds in which it is enmeshed.

True enough as a matter of theory. But from my limited observations the corrosive effects of the market seem darn-near inevitable. (Those observations being limited to parts of the the U.S. and India.) So shall we turn to the benign socialistic state as an alternative? Yikes! Even worse. (See, e.g., North Korea.)

What then? Well, that's the question for which I have no clear answer. If you do, let me know. At the very least, perhaps peripatetic folks like me could stop moving around so much. A lack of a sense of place or rootlessness, is both a cause and an effect of an oversized market. Commitment to a single location with permanent family, church, and social relationships would reduce the corrosion that correlates to capitalism.

LIBOR Lies

I don't know how many millions of dollars of commercial loans I closed for various lenders had interest rates keyed to the London Interbank Offered Rate (LIBOR) but it was a lot. Now we come to find out that the folks charged with setting the rate were inventing it on the fly (see here). This probably didn't hurt my clients' borrowers because the official LIBOR understated the participating banks' actual costs of borrowing. But more ominously (and perhaps criminally), the misstated LIBOR permitted the trading arms of the same banks to profit on deals like interest rate swaps and interest rate derivatives. Both European and American authorities have begun criminal investigations and private investors have sued. Just one more example of imperfections of the "invisible hand."

"The market" can be and sometimes is gamed and don't let simple-minded free marketeers tell you otherwise. Which does not mean that state controlled markets are somehow pristine and uncorrupted. Which does mean that all of us suffer from a deep-seated corruption and that no system--free market or statist--can fix that problem.

God and Investment Banking

Colleague Mike Schutt linked to this blog by John Terrill.  Consider the following assertion (quoting Lloyd Blankfein): “Investment banking can be God’s work.”  A fair number of folks would agree with the this sentiment with but one minor emendation: change “God’s” to “devil’s.”  Terrill would, I think, agree with both versions.  Investment banking can serve divine or diabolical ends; it’s what you do with it that matters.  Or, better yet, who you are, that directs the telos of any human endeavor, whether investment banking or social work.

This is undoubtedly true (which is to say, I agree with myself).  Humble sinners tend to do less evil than arrogant ones.  However, we should not ignore the structural question: What should be the place of contract in the world?  I most recently addressed the justification of contract law here but the scope of legally enforceable agreements is a normative one.

Just because we can commodify something and give an agreement related to it legal sanction doesn’t mean that we should.  The existence and scope of contract law is a political issue and, as we have with patenting life forms, our (read “American”) political impulse is to extend legal protection as far as possible.  The question is not socialism or capitalism; the benefits of private ordering have, I think, won the day.  Instead, the contemporary question is whether we should add legal sanctions to social ones.  Whether the law should add its coercive cachet to the sorts of financial instruments whose trade enriched and enriches our investment bankers.

A Consuming Corruption

Go to page four of the Fall 2009 issues of Ministry and Leadership, a quarterly publication of Reformed Theological Seminary: http://www.rts.edu/Site/Resources/M-L/issues/ML-Fall-2009.pdf.  (Disclosure: I'm a 1997 grad of RTS-Orlando.)

There you'll find an article by Bruce Baugus, "A Consuming Corruption."  Baugus defends two assertions as well as can be done in a short (1100 word) essay: consumerism is not identical to capitalism (God calls us to a life of self-denial, not one of self-indulgence) and the free market is legitimate (private property is lawful and goods and services can freely--and justly--be exchanged).

Dr. Baugus was kind enough to send me his Word file; my Contracts students will see it soon.  You can see it even sooner if you click on the link above.  A fine meditation for Labor Day.